The Federal Court of Canada has issued a Supplemental Judgement and Reasons (2017 FC 637) to decide outstanding issues concerning damages to be paid to Dow Chemical Company by Nova Chemicals Corporation in respect of earlier patent infringement proceedings. Nova was ordered to pay Dow $644 million in damages in this most recent decision clarifying how the damages for patent infringement were to be calculated.

Earlier Decision

In September 2016, the Federal Court of Appeal upheld a Federal Court decision that Dow’s patent for polyethylene copolymers for use in packaging applications was valid and infringed by Nova’s SURPASS products (2016 FCA 216). Dow elected for an accounting of Nova’s profits as the remedy for the infringement. Leave to appeal to the Supreme Court of Canada on the original infringement decision was dismissed.

Quantification of Damages

A reference judgement issued in April 2017 held that Nova was liable to account for revenues from sales as well as profits arising from its ‘springboard’ into the market as a result of the infringement (2017 FC 350). The parties were then directed to resolve the damages and profits payable by Nova.

The parties were unable to fully resolve the sum that was payable, and the current supplemental judgement addresses the three outstanding technical issues the parties could not resolve. Dow was successful on the issues of capital cost deductions and the allocation of fixed costs, but was not successful on the topic of the timing of currency conversions.  The quantum of damages to be paid by Nova is extremely high for Canadian patent litigation.